Tasty : Preliminary Results – 7th April 2021

7 April 2021

Tasty plc

("Tasty" or the "Company")

Preliminary results for the 52 weeks ended 27 December 2020

Tasty (AIM: TAST), the owner and operator of restaurants in the casual dining sector, announces its annual results for the 52 week period ended 27 December 2020.

Key Points:

Financial

• Revenue £24.2m (2019: £44.6m), significantly impacted by Covid-19 related restrictions
• Adjusted EBITDA1 loss (pre IFRS 16) of £1.5m (2019: profit £1.1m)
• Adjusted EBITDA (post IFRS 16) of £2.7m
• Impairment charge of £8.1m (2019: £nil)
• Loss after tax for the period (post IFRS 16) of £12.7m (2019: loss of £0.3m (pre IFRS16))
• Bank loan as at 27 December 2020 of £nil (29 December 2019: £1.7m)
• Net cash after allowing for deferred creditors and HMRC payments of £1.5m
• Post year end - bank loan of £1.25m fully drawn in January 2021

Operational

• Sale of More London dim t completed in January 2020 for gross proceeds of £2m
• All sites closed from 24 March 2020 including takeaway
• Phased reopening of some sites for takeaway from end of May 2020 and gradually reopened most sites for eat-in from July 2020
• All sites closed again in November 2020 for in-store dining, with further tier restrictions introduced in December 2020 impacting trading
• Currently trading from 38 of 54 restaurants for delivery and takeaway
• Post year end - Samuel Kaye stepping down from Board following 2021 Annual General Meeting

1 Adjusted for depreciation, amortisation, share based payments

The report and accounts for the 52 week period ended 27 December 2020 will be available on the Company's website at https://dimt.co.uk/investor-relations/shortly.

For further information, please contact:

Tasty plc	Tel: [phone]
Jonny Plant, Chief Executive
Cenkos Securities plc (Nominated adviser and broker)
Mark Connelly / Katy Birkin	Tel: [phone]

Certain of the information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK version of the EU Market Abuse Regulation (2014/596) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended and supplemented from time to time.

Chairman's statement

I am pleased to be reporting on the Group's annual results for the 52 week period ended 27 December 2020 and the comparative 52 week period ended 29 December 2019. The Group currently operates 54 restaurants, comprising of five dim t and 49 Wildwood restaurants.

The last 12 months have been extremely tough and required swift action to mitigate the extraordinary challenges and uncertainty following the outbreak of the pandemic. From the onset, the Group quickly implemented various measures to stabilise the business and ensure the safety of our staff and customers. We navigated our way through the cycle of various lockdown restrictions and consequent reopenings, through agility and quick responses to the everchanging constraints. The Board would like to thank our loyal staff, suppliers, customers, landlords and other trade creditors who have supported us throughout this unprecedented difficult period.

Following the sale of More London dim t for £2m in January 2020, we repaid our bank loan and were fortunate to have no banking covenant pressure when we shut down our estate in March 2020. As previously communicated, cash preservation has been key to maximising the Group's ability to manage the impact of the pandemic. With lockdown continuing into this year, in January 2021, the Group drew down its £1.25 million, four year term loan from its existing bankers, Barclays Bank plc, secured in September 2020, in order to strengthen its balance sheet and provide additional working capital.

In common with much of the UK hospitality industry we have where possible, utilised the various Government support schemes, including furloughing our staff during periods of full or partial closure, VAT reductions and business rate holidays. Sadly, as previously announced, we had to make a significant part of our workforce redundant to preserve the business for our remaining stakeholders, including our current employees.

While the economic and retail environment continues to be challenging, trading in between lockdowns and restrictions has been encouraging. We currently have 38 restaurants open for takeaway only. With the bank facility and continued support from our creditors and landlords, we expect to get through these difficult times due to our responsiveness and restructured operational base. Cash preservation and maintaining our staff and customers' wellbeing continues to be paramount.

The cash balance at year-end reflects our cash preservation strategy and a deferral of payments due to landlords, HMRC, and other trade creditors. When these outstanding payments are allowed for, our net cash at year-end is approximately £1.5m.

We believe that the lessons we have learnt over the last 12 months have strengthened our operating model. We have found new ways of operating the business and have become agile at adapting to the current conditions. This includes new delivery partnerships which we envisage will continue in the future. Having survived the turmoil of the past 12 months, and as we come out of this pandemic and

restrictions are lifted, we are confident that we are in a good position to service the pent-up customer demand and take advantage of the reduced competition.

As previously announced, Adam Kaye stepped down from the Board on 15 September 2020. In addition, the Board is sad to announce that Samuel Kaye will be stepping down as Non-Executive Director following the 2021 Annual General Meeting ('AGM') (date to be confirmed). Samuel stepped down as Joint CEO to become Non-Executive Director in December 2020 and both Adam and Samuel are leaving the Board to focus on their other commercial interests. The Board regrets that they are departing and would like to thank both of them for the enormous support and invaluable experience that they have provided to the Board from the Group's inception and continue to on an ongoing basis as substantial shareholders. The Board has commenced the search for an additional independent non- executive director and an announcement will be made, as appropriate.

Dividend

The Board does not propose to recommend a dividend (2019: £nil).

Keith Lassman

Chairman

6 April 2021

Strategic report for the 52 weeks ended 27 December 2020

Tasty operates two concepts in the casual dining market: Wildwood and dim t.

Wildwood

Aimed at a broad market, our 'Pizza, Pasta, Grill' restaurant remains the Group's main focus. Our sites are primarily based on the high street. However, we have a number of leisure, retail and tourist locations that have historically traded well, highlighting the broad appeal of the offering. Located nationally, mainly outside of London, Wildwood is currently open for takeaway service from 34 of the 49 Wildwood branded restaurants.

dim t

Our pan-Asian restaurant now trades from 5 sites, serving a wide range of dishes including dim sum, noodles, soup and curry. Currently, 4 of the 5 sites are open for takeaway service only.

Introduction and Covid-19

The beginning of 2020 was generally encouraging; however, the pandemic meant that the year played out very differently from what was anticipated.

In line with Government restrictions, we closed all our restaurants for eat-in on 20 March 2020, and decided to close all remaining open sites for takeaway and delivery on 24 March 2020. At the end of May 2020, we gradually started to reopen for takeaway service only whilst strictly following social distancing and health and safety guidelines. When the first lockdown was lifted, on 4 July 2020, the Group began a phased reopening programme for eat-in; though 6 sites remained closed during this period and have not reopened since March 2020.

The "Eat Out To Help Out" ("EOTHO") Scheme was a great Government initiative and helped trade recover in August 2020. The Group experienced a favourable level of sales during this period, due to the increase in UK residents staying in the UK during the summer of 2020, Government initiatives and pent up demand built up since March 2020. This positive trading was short-lived as stricter measures were imposed in September 2020, including the 10 pm curfew and "work from home if you can", followed by subsequent lockdowns and the introduction of the tier system. As with other UK hospitality operators, the tier system in December 2020 had a considerable impact on our Christmas trade. The mild optimism we had in the Summer was dampened by the end of the year, and trading during this historically crucial period was poor. However, with the vaccination programme on target, staycation demand, and the prediction of an initial "surge" in the economy, we hope that the future will be more promising once lockdown ends. However, this will depend on when we can return to some kind of normality. In line with the latest Government announcements, we will open outdoor spaces where feasible in April 2021 and gradually open dine-in from May 2021; although the timing is subject to change depending on infection levels and the progress of the vaccination programme. Although closing and reopening, often with very little notice, has impacted our operating costs including inventory write-off, we have become acclimatised and effective at operating within this cycle.

Currently, we are operating under the third national lockdown, and 38 sites are open for takeaway and delivery. We are in the fortunate position that many of our sites are in residential areas and, consequently, less dependent on trade from office workers. To optimise the delivery trade, we now partner with Uber Eats and Just Eat in addition to Deliveroo. While delivery helps keep some sites open, the high cost of delivery erodes our margin. Dine-in is central to the business, and we look forward to welcoming customers back into our restaurants in the early summer.

Government support

The Government initiatives, including the Job Retention Scheme ("CJRS"), business rates holiday, deferral of HMRC payments, EOTHO and VAT reduction, have proved invaluable in supporting the Group during this difficult time. With the restrictions for dine-in remaining in place until May 2021, there will be further pressure on our cash reserves. The only way to alleviate this is to reopen our restaurants and utilise Government support. Government initiatives alone do not compensate for lost trade.

Suppliers

Since the first lockdown last March, we have worked with our food and beverage suppliers to negotiate extended payment terms and/or discounts; when we reopened for trade in the summer, they supported us in mobilising the business again. We are most thankful to everyone that helped and continues to assist us through these difficult times.

Rent negotiations

The Group has now successfully achieved consensual lease concessions and rent reductions to March 2021 on more than two-thirds of the estate. The Group is continuing negotiations with landlords and other creditors regarding outstanding debts. Given the current third lockdown and the moratorium expected to end in June 2021, we now anticipate that we may require further landlord support.

The Board believes that with continued creditor assistance, a more formal procedure such as a company voluntary arrangement ("CVA") may be avoided but we continue to consider all options.

The Group will constantly review its existing estate to consider whether some restaurants should close permanently. The pandemic accelerated the decision to surrender the following two restaurants:

Oakham Wildwood

On 24 September 2020, this site was surrendered at £nil.

Letchworth Wildwood

On 9 December 2020, this site was surrendered at £nil.

Oakham was one of the six sites that had not reopened since the first lockdown. In respect of other sites, we will review our options to assign or surrender if we are unable to negotiate a favourable rent, and reopening is not viable.

The following site was disposed of due to the attractive premium:

More London dim t

On 7 January 2020, this site was assigned for a total consideration of £2m.

Financial stability

From the onset of the pandemic, the Group reviewed all business costs and took steps very early to reduce outgoings, including salary reductions, reduced services, and ensuring only necessary costs were incurred.

We operated at a minimum staffing level during the first lockdown in March 2020, with over 98% of our staff furloughed. To secure the longer-term future of the Group and support maximum employee levels, we also took the agonising decision to make approximately one-third of our staff redundant across our restaurants and head office. This was a very difficult decision and process, but our priority was to save the business and support those affected as best we could. Currently, the majority of our eligible staff are on flexible furlough.

We have sought to preserve cash by deferring creditor, landlord and HMRC payments, and the Group drew down a bank loan of £1.25m in January 2021.

Appointment of strategic advisers

The Group is continuing to work with its advisers, KPMG, to assess the potential impact of Covid-19 on the business and the various strategic options available to the Group. With the progress made on consensual negotiations with landlords and other creditors, the Group has to date managed to prevent a CVA. However, with dine-in restrictions in place until May 2021, there is additional pressure on cash reserves. The Board will continue to explore all options but are hopeful that with continued creditor assistance, a more formal procedure may be avoidable.

People

We recognise that this has been a difficult time for everyone across our business, including those working remotely or in environments with additional protocols and reduced teams, and those on furlough. At one stage, 98% of our employees were furloughed and, while unfortunately, we have not been able to retain all our staff, we still employ approximately 650 people.

Every team member has played their part in helping us survive this unprecedented year. We have been overwhelmed with the dedication of our teams over the last 12 months. Despite personal and